'Voluntary' Greek Debt Deal Still Possible: IIF Chief

The lead negotiator for private-sector Greek debt holders says he's still hopeful a deal can be reached that satisfies creditors while enabling the financially strapped nation to grow.

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Charles Dallara, managing director at the Institute for International Finance, told CNBC that despite reports of talks breaking down, there still is hope for a settlement that likely will decrease both the principal and interest rate Greece will have to pay on outstanding bonds.

"I'm actually quite confident that if we can reach a voluntary accord that we can mobilize a very high participation," Dallara said. "Every firm will have to make their own choice about participation in this. I do know that we are working very closely with the bulk of the creditors. That are part of our group and are giving us the guidance that we need to represent their interests."

The "voluntary" nature of any deal is critical in that it would prevent credit default swap payoffs from taking effect. The CDS are insurance policies that pay in the event of an involuntary Greek default that would come when its next debt payment comes due on March 20.

Negotiators are trying to put together a deal ahead of the $14.5 billion-euro payment.

Charles Dallara: Greek Debt Deal Can Be Reached

Charles Dallara, Institute of International Finance, provides Insight on why he believes an accord with Greece can be reached, and says he remains committed to a voluntary agreement.

Some debt-holders, though, have bristled at having the coupon rate cut. Reports have put proposals in the 3.5 percent to 4 percent range, though Dallara would not comment on specific rates.

Standard & Poor's warned Tuesdaythat the tenuous nature of the situation is likely to generate a downgrade to "selective default." Officials, though, say the European Union still can stay unified despite the default.

"I feel confidence that if an agreement is reached on their behalf that participation will be substantial," he said. "I'm not terribly concerned about individual investors expressing views at this stage. That's their prerogative, that is their right, and they may choose their own course."